TULSA, Okla. — As prices continue to climb, family budgets feel the squeeze. But a simple strategy called the 50-30-20 rule may help take away some of that stress.
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Jonathan Bransford, who has a family of four, says his household focuses on the basics first.
“Our biggest strategy is just to make sure we pay the credit card balance in full every month,” Bransford said.
From there, he said the family works through the rest of their finances.
“We make sure to like figure out like all of our fixed costs and then just kind of play with, you know, what we have left over for everything else,” Bransford said.
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Bank of America consumer expert Matthew Beatty said the 50-30-20 rule can work as a framework for prioritizing family spending.
“So you put 50% of your income towards your needs, 30% towards your wants, and 20% towards savings,” Beatty said.
That savings component is key. It gives families a cushion to cope with things like sudden surges in gas prices. It also leaves room to afford some of the nice things in life.
“You’ve got money set aside that you’re not scrambling or going into debt for a small vacation or a weekend getaway,” Beatty said.
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Jessica Degginger, who has a family of three, said her family set spending priorities before she became a stay-at-home mom.
“So before I decided to stay home and homeschool my child, we looked at our budget and made sure that that was financially possible and we weren’t cutting into retirement or our savings,” Degginger said.
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That kind of planning takes the stress off paying regular bills and provides peace of mind knowing there are savings set aside for both retirement and emergencies.
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